According to finance ministry estimates, the total external debt servicing, including principal and interest, is expected to further decline to around $8 billion in the next financial year.

Sources claim that the debt service payments on the external account has been coming down as a result of prudent debt management undertaken by the government in the aftermath of the crisis which plagued the country a decade ago. The focus had all along been on the non-debt creating inflows and long-term credit, sources added.

The finance ministry, sources said, was currently engaged in rearranging the country's external debt portfolio as part of the debt management exercise. As a result, the debt service payments as well as the external debt burden on the exchequer would further decline in the coming years.

The debt service ratio too has improved over the years. The ratio was as high as 35.3 per cent in 1990-91. The ratio declined to 18.2 per cent during the first three quarters of 1999-2000. Similarly, the debt to GDP ratio, which shows the magnitude of external debt in relation to domestic output, declined from high of 41 per cent in 1991-92 to 23.5 per cent in 1998-99.

The the end of December 1999, the debt stock as ratio of GDP is estimated at 22.3 per cent. Also the ratio of short-term to total external debt has declined gradually from the high of 10.2 per cent at the end of March 1991 to 4.5 per cent at end of March 1999.

During 1998-99, external debt service payments, which include principal and interest, totalled $10.73 billion. Thereafter, it declined to $9.14 billion in 1999-2000. The debt servicing, however, does not include NRI deposits, foreign currency convertible bonds, self-liquidating loans and FII investments in government securities.

Sources said that the total debt stock, as on September 30, 1999 was $98.87 billion. The debts from multilateral lending institutions total $30.84 billion. This include $18.69 billion from IDA, $7.88 billion from IBRD and $3.77 billion from Asian Development Bank.

Outstanding bilateral debts totalled $18.39 billion. These include $9.29 billion from Japan, $3.31 billion from Germany, $1.51 billion from the US and 0.93 billion from France.

The other components of the external debt include commercial borrowings ($20.47 billion), NRI and foreign currency deposits ($13 billion), export credit ($6.89 billion), short-term debt ($4.61 billion), rupee debt ($4.53 billion) and International Monetary Fund ($0.13 billion).